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This week we’re in conversation with Bhavya Arora, HRBP, Sprinto. We talk about “When you can't promote/give a raise to a top performer, how do you keep them motivated?”
The interview is edited for length and clarity.
How to Motivate a Top Performer When a Promotion is Not Possible?
Amid the recession and fewer opportunities for appraisals, many employees crave a promotion to climb up the ladder. However, it's not always possible to grant a promotion. In such a scenario, it's important to motivate them in other ways.
Consider offering them a temporary role: Instead of directly promoting them, consider offering a temporary role as a test. For example, if an employee aspires to become a manager, offer them a role as a temporary manager for six months. This will give both the employee and the company an opportunity to assess if the employee has the necessary skills and bandwidth to take on the role. Transparency is the key here, as it will also help employees understand if they are ready for the role or if they need to improve their skills.
Consider alternate forms of compensation: If a promotion is not possible, consider other forms of compensation to motivate employees. This could include bonuses, stock options, or a raise in salary without a change in designation. In the startup world, designations are often not a big deal, so employees may be more interested in meaningful work and good compensation rather than a specific title.
Provide opportunities for growth: Even if a promotion is not possible, provide opportunities for employees to grow and learn new skills. This could include cross-functional training, leadership development programs, or mentorship opportunities. This will help employees feel valued and motivated to grow more within the organization. You can also provide them with development opportunities, such as training or coaching, to help them improve their skills and prepare for future promotions.
Communicate the bigger picture: It's important to help employees understand the bigger picture of why a promotion may not be possible at the moment. Help them see the impact of their promotion on the team and the organization as a whole. This will help them understand that it's not just about their individual performance, but about what's best for the company
Keep communication open: Keep an open line of communication with employees and let them know that you value their work and contributions. Make sure they feel heard and that their concerns are addressed. This can help maintain a positive relationship and keep employees motivated even in difficult circumstances.
How to Understand Employee Motivations for Promotion?
Understanding employee motivations for a promotion is critical to providing effective performance management. Different people have different motivations, some are intrinsic, while others are extrinsic. Therefore, it is important to find out what drives each employee's desire for a promotion.
For example, some employees may be motivated by public recognition, while others may want better titles /status, or even the opportunity to lead a team. To understand an employee's motivation behind their promotion request, it is important to have open and honest communication. One-on-one meetings and regular feedback sessions can be helpful in gaining insight into an employee's goals and aspirations.
Additionally, companies should strive to treat all employees equally and fairly, regardless of their role or level within the organization. This includes implementing policies that promote equality and fairness in the workplace.
When considering promotions, companies should also be transparent and realistic with their timelines and expectations. For instance, if a company is facing financial difficulties, it may not be feasible to offer a promotion at the moment. However, offering equity or stock options can be an alternative way to recognize an employee's contribution to the company.
How are companies adjusting salary and appraisal in the current market?
In recent years, startups disrupted the market by offering higher salaries and benefits, which created a skewed salary bracket. However, the recession and layoffs have brought companies back to reality, and they are now re-evaluating their salary bands. Many are comparing their brackets to service-based companies, which typically offer lower salaries. As a result, the percentage shift for salary increases has dropped from 30% to 8-10%.
Regarding appraisals and salary negotiations, companies are now focusing on rewards and recognition. For instance, companies are offering learning and development initiatives, sponsoring events, or offering courses of employees' choice. In some cases, companies may increase the variable pay rather than the fixed pay, which motivates employees to achieve their goals.
Companies are finding ways to balance employee satisfaction with realistic budget constraints. While the market has shifted, companies are still making an effort to ensure employees feel appreciated and acknowledged for their hard work.
How much do you think constant communication helps during this process? And how does it help you to retain employees?
In today's world, where everything can go viral in seconds and people are quick to take legal action, it's crucial for companies to have proper documentation and communication in place. Handbooks are essential to lay out language and provide a reference point for employees to refer to when they have questions.
However, simply having a handbook is not enough. Constant communication is equally important in retaining employees. No matter how detailed the handbook is, people will always have queries, and it's important to be available to answer them. By being approachable and responsive, employees feel valued, heard, and supported, which can lead to increased job satisfaction and retention.
Documentation is also critical, as it provides a clear record of what has been agreed upon between the company and the employee. This helps to avoid misunderstandings and disputes in the future, as there is a clear reference point to refer to. In a sensitive environment like today's workplace, proper documentation is necessary to protect both the company and the employee.
What other than communication can help you retain employees in such a sensitive environment right now?
It's important to provide employees with a clear career progression plan. However, it's not always feasible to make everyone a manager. Here are some ways to support career growth and recognition for employees:
Apart from utilizing recognition, making the best use of open communication, training, and other additional benefits, and offering lateral promotions can be a way to go. This means promotions that offer higher responsibility but not necessarily a managerial title. It can still provide career growth opportunities and keeps the possibility of the managerial title for the future.
Additional benefits can include small gestures like extra time off, upgraded insurance, or other perks that can make a big difference in employee morale and retention.
Everything we have talked about includes money, but some companies don’t have money today. How can we still make it work?
While offering financial incentives is important, it is not always possible for companies that are strapped for cash. In such cases, building a psychologically safe environment can be just as effective.
A great work culture can be the deciding factor for an employee to stay or leave a company. Springworks has an additional bonus if someone utilises their full L&D. This includes having a supportive environment, good leadership, and opportunities for growth. A company cannot build a culture overnight; it is an ongoing process. Non-monetary incentives such as additional leave, spiffs, and job title changes can also motivate employees.
A psychologically safe environment allows employees to take risks without fear of being bullied, humiliated or fired. We shouldn’t be walking on eggshells constantly. Respectful communication and a supportive management style are essential for building such an environment.
Money is important, as it pays for our basic needs and desires. However, it's not everything. Acknowledgement, appreciation, and positive work culture are equally important for overall satisfaction and happiness. Many people have left high-paying jobs to be in a better work environment. As one grows in their career, one realizes the significance of a good work-life balance. A bond or a joining bonus is not worth it if one is unhappy with the work environment. Eventually, we all want a career that aligns with our values and goals, just like our non-work-life aspirations.
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